Warsh Nomination Triggers Market Plunge: Bitcoin and Gold See Sharp Declines

Financial Market Turbulence in January 2026

According to ХВИЛЯ: The final week of January 2026 brought significant turbulence to global financial markets, triggered by the announcement of Kevin Warsh's nomination to chair the Federal Reserve (Fed). This news prompted a sharp sell-off, with prices for gold and Bitcoin plummeting, and silver experiencing a severe crash. Gold, after initially reaching a historic high of $5,608 per ounce, lost roughly 12% in a single day on January 30, falling below the $5,000 mark. Bitcoin, which had been trading around $90,000 at the start of the month, dropped below $79,000 for the first time since April 2025. This volatility underscores how sensitive markets are to perceived shifts in U.S. monetary policy leadership.

Despite the late-month drop, gold had its strongest January since the 1980s, gaining approximately 20% over the month. It first crossed the $4,600 threshold on January 12 and broke through $5,000 on January 25-26. However, the dramatic fall on January 30 was described by Bloomberg as the metal's largest intraday drop since the early 1980s. Silver also suffered a historic collapse, plunging 30% in one trading session-its worst day since 1980-with its price falling from a record $121 to between $76 and $83 per ounce.

The Kevin Warsh Nomination and Its Impact

President Donald Trump nominated Kevin Warsh on January 30 to replace Jerome Powell, whose term ends in May. Markets perceive Warsh as a policy hawk, leading to expectations of a more aggressive tightening of monetary policy. It is worth noting that the U.S. Dollar Index had already lost about 8.8% since late 2024. In 2025, central banks globally purchased 297 tons of gold, with Poland leading the acquisitions by buying 95 tons.

In the cryptocurrency segment, Bitcoin saw significant declines. It fell to $85,200 on January 29, marking a 2026 low at that time, then dropped further to $81,000 on January 30. By January 31, it had slipped below $79,000, trading in the $77,000-$79,000 range that evening. Ethereum also declined by 9% to $2,445, while Solana fell nearly 10% to $105. U.S. spot Bitcoin ETFs recorded a net outflow of funds for three consecutive months, with $1.61 billion withdrawn in January alone.

The market situation highlights the unpredictability of the financial environment amid geopolitical instability, which includes threats from President Trump regarding Greenland and Iran, as well as ongoing tensions in the Middle East. Clearly, markets are anticipating the future course of new monetary policy, which could influence investment decisions in the coming months.

This financial market turbulence demonstrates investor sensitivity to changes in monetary policy and the geopolitical landscape. The nomination of Kevin Warsh could become a pivotal factor influencing central bank and investor strategies in the near term.

Risks associated with potential changes in interest rates and adverse political events may continue to fuel market fluctuations, requiring investors to exercise caution and remain attentive to shifting trends.